Big Changes for MGAs: What New Rules Mean for Life & Health Advisors (Morning Market Minute Recap)

GOOD MORNING, EVERYONE! Just like I shared in my recent Morning Market Minute, we've got some MAJOR REGULATORY SHIFTS coming down the pipeline that's going to impact nearly every one of us in the life and health insurance business. Let me break it down for you in plain English.

THE BIG PICTURE: MGAs ARE TAKING OVER

Here's something that might surprise you – MGAs now handle TWO-THIRDS of all new individual life and health policies being written in Canada. That's according to FSRA in Ontario, and it's a massive shift from how things used to work.

But here's the thing: as MGAs have grown into this dominant force, there's been a real LACK OF REGULATORY OVERSIGHT. We've had this gray zone sitting right in the middle of our distribution channels – between the insurance carriers and us agents who work directly with clients.

Rick DeCosta from BLG, who specializes in insurance law, put it perfectly: "You had one major part in the middle that was really left unchecked, and now regulators are trying to play catch up."

THE DOMINO EFFECT ACROSS CANADA

Saskatchewan was the first to wake up to this back in 2020 when they introduced MGA licensing. New Brunswick followed suit in 2023 after several years of reviews. And now? Ontario is rolling out its comprehensive framework in June 2026.

Why the sudden urgency? Well, FSRA's reviews have uncovered some pretty troubling practices:

• Agents not being properly trained or supervised
• Clients being sold policies they really didn't need
• Recent enforcement actions against major players like Great Way Financial and World Financial Group

WHAT'S CHANGING: THE NEW RULES BREAKDOWN

FSRA launched a six-part action plan with proposed rules under category 2025-001. Here's what's coming after June 1st, 2026:

Licensing Requirements

• MGAs will need to be licensed and renewed at least every three years
• Greater regulatory oversight across the board

Compliance Programs

• Must have designated compliance officers (some MGAs haven't had these!)
• Annual assessments of sub-MGAs are now REQUIRED

Client Protection

• Annual client continuity plans are mandatory – no more clients left stranded when agents leave
• This is huge because agent turnover happens quite regularly in our industry

INDUSTRY RESPONSE: THE GOOD AND THE CHALLENGING

THE POSITIVE SIDE: Many in our industry see this as a logical step. We're talking about better consumer protection, improved training, and making sure everyone in the distribution chain is accountable. For MGAs with strong compliance systems already in place? It's business as usual.

THE CHALLENGES: Some MGAs are concerned about the administrative burden. Think about it – if you're dealing with dozens of insurer contracts or subagencies, that's a lot of paperwork and processes to manage.

There's also ongoing debate about who should be responsible for compliance audits – FSRA, the MGAs, or the insurance providers themselves? Some MGAs are already facing multiple audits throughout the year, and it's becoming quite the burden.

THE ORPHAN CLIENT PROBLEM

Here's something we need to talk about: How do we ensure ongoing service to orphan clients? Especially when trailing commissions on those orphan clients aren't necessarily attractive, and there's not much incentive for advisors to take over these contracts.

This is where those client continuity plans become crucial. We can't leave people hanging when changes happen in our industry.

WHAT THIS MEANS FOR YOU AS AN AGENT

Bottom line? Your relationship with your MGA will be just as regulated as your relationships with the carriers. When your MGA asks for compliance documentation, it's now a regulatory requirement with real teeth behind it. You're going to have to comply – no ifs, ands, or buts about it.

Calvin Kong, an Ottawa-based agent, summed it up perfectly: "There's going to be clear lines of communication, and we'll be able to work more as a collective." That's especially important as our industry shifts away from the traditional agent model and addresses the gaps in training and mentorship that have been taking place.

LOOKING AHEAD: MORE CHANGES COMING

Between now and 2026, there's going to be A LOT OF NEGOTIATION taking place. Many MGAs are making recommendations back to FSRA right now, and some of the rules are still being hammered out.

One thing that's being discussed? Possible restrictions on agent recruiting. We'll need to stay tuned as the year progresses to see exactly how this shakes out.

The rules are principled-based, focusing on outcomes rather than prescribing every detail. That means more guidance from FSRA will be needed as we move forward. Insurers and MGAs will share accountability, but clarity on roles and responsibilities is still a work in progress.

THE SILVER LINING: PROFESSIONALISM AND TRANSPARENCY

Here's what I want you to remember: These changes are about more transparency, better consumer protection, and more professionalism within our industry. And that's especially important for all of us who've been doing this work the right way all along.

We're moving toward:

• Clear lines of communication
• Better training and mentorship opportunities
• More accountability across the distribution chain
• Stronger consumer protection measures
• A more professional industry overall

YOUR NEXT STEPS

As these changes roll out over the next year and beyond, here's what you should be thinking about:

1. Stay Informed – Keep up with the regulatory changes as they develop
2. Review Your MGA Relationships – Make sure you're working with MGAs that are preparing for compliance
3. Invest in Training – Take advantage of improved training and mentorship opportunities
4. Document Everything – Get used to proper compliance documentation now
5. Plan for Continuity – Think about how you'll handle client service disruptions

LET'S NAVIGATE THIS TOGETHER

Look, change can feel overwhelming, but this is ultimately about making our industry stronger and more trustworthy. These regulations will help us better serve our clients and build more sustainable practices.

GOT QUESTIONS? I'm always here to help you navigate what's next and set you up for long-term success. Whether you're a seasoned veteran or just getting started in this business, we're all in this together.

YOUR JOURNEY. OUR EXPERTISE. BUILDING THE FUTURE TOGETHER.

Feel free to reach out to us if you want to discuss how these changes might impact your business or your clients. That's what we're here for – helping you stay ahead of the curve and succeed in this evolving industry.

Have yourself a fantastic day, and remember – these changes are paving the way for a more professional, more transparent, and ultimately more successful industry for all of us!